Stimulus Not Enough?

March 9, 2009

“President Obama’s plan to stimulate the economy was ‘massive,’ ‘giant,’ ‘enormous.’ So the American people were told, especially by TV news, during the run-up to the stimulus vote. Watching the news, you might have thought that the only question was whether the plan was too big, too ambitious.

Yet many economists, myself included, actually argued that the plan was too small and too cautious. The latest data confirm those worries — and suggest that the Obama administration’s economic policies are already falling behind the curve.”

Krugman worries that the stimulus bill isn’t big enough, the administration doesn’t have a good plan to rescue the banking sector, and the public is going to turn against the administration when things get worse over the coming months (and the Republicans will be quite happy to exploit that while sticking to their always-tax-cuts-and-nothing-but-tax-cuts position).